Forex – The euro extended gains against the U.S. dollar on Tuesday, as global stock markets rallied on the back of optimism that European leaders would take decisive action to deal with the financial crisis in the euro zone.
EUR/USD hit 1.3641 during European late afternoon trade, the pair’s highest since September 21; the pair subsequently consolidated at 1.3628, advancing 0.69%.
The pair was likely to find support at 1.3361, Monday’s low and an eight-month low and short-term resistance at 1.3693, the high of September 12.
Market sentiment was boosted by speculation that European officials are examining ways to enlarge the capacity of the euro zone’s bailout fund, the European Financial Stability Facility.
German Chancellor Angela Merkel urged lawmakers to back an expansion of the EFSF earlier and stressed the importance of approving changes to the facility’s powers ahead of a vote on the issue later in the week.
Earlier in the day, the euro dipped after Spain's economy minister said plans to expand the fund to EUR2 trillion from its existing EUR4 billion were not on the table.
Elsewhere, the euro edged higher against the pound, with EUR/GBP inching up 0.06% to hit 0.8699.
Also Tuesday, a U.S. report showed that the S&P/Case-Shiller home price index fell less-than-expected in July, dropping 4.1% following a 4.5% decline the previous month.
Analysts had expected home prices to drop by 4.4% in July.
EUR/USD hit 1.3641 during European late afternoon trade, the pair’s highest since September 21; the pair subsequently consolidated at 1.3628, advancing 0.69%.
The pair was likely to find support at 1.3361, Monday’s low and an eight-month low and short-term resistance at 1.3693, the high of September 12.
Market sentiment was boosted by speculation that European officials are examining ways to enlarge the capacity of the euro zone’s bailout fund, the European Financial Stability Facility.
German Chancellor Angela Merkel urged lawmakers to back an expansion of the EFSF earlier and stressed the importance of approving changes to the facility’s powers ahead of a vote on the issue later in the week.
Earlier in the day, the euro dipped after Spain's economy minister said plans to expand the fund to EUR2 trillion from its existing EUR4 billion were not on the table.
Elsewhere, the euro edged higher against the pound, with EUR/GBP inching up 0.06% to hit 0.8699.
Also Tuesday, a U.S. report showed that the S&P/Case-Shiller home price index fell less-than-expected in July, dropping 4.1% following a 4.5% decline the previous month.
Analysts had expected home prices to drop by 4.4% in July.